EU-Moldova relations, Factsheet

Bruxelles, 10/11/2017 - 15:08, UNIQUE ID: 160621_3

Factsheets

Relations between the European Union and the Republic of Moldova (hereinafter "Moldova") have intensified in the past years. Moldova joined the EU's Eastern Partnership in 2009 and the EU-Moldova Association Agreement entered into force on 1 July 2016. This includes the introduction of a Deep and Comprehensive Free Trade Area (DCFTA).

The Association Agreement strengthens Moldova's political and economic ties with the EU. It sets out a reform plan in areas vital for good governance and economic development and strengthens cooperation in several sectors. By signing the agreement, Moldova committed to reforming its domestic policies on the basis of EU laws and practice. To do so, the country benefits from substantial EU support.

Since 28 April 2014, Moldovan citizens with a biometric passport can travel to the Schengen area without a visa. In the period from April 2014 to September 2017, more than 1 million Moldovan citizens have benefitted from the visa-free regime. The EU has provided support to Moldova for reforms in the areas of justice and security, including in the fight against corruption, which are related to visa liberalisation.

For Moldovans with non-biometric travel documents, the upgraded Visa Facilitation Agreement continues to apply, with a reduced visa fee of €35 and a fee waiver for students, those visiting family in the EU and various other groups of citizens. The Visa Facilitation Agreement also provides for easier access to multiple-entry visas with long validity. The refusal rate for visa applications has sharply decreased from 11.4% in 2010 to 3.9% in 2016.

Moldova, the EU and interested EU Member States also signed a Mobility Partnership on 5 June 2008. The Mobility Partnership offers a political framework for comprehensive and tailor-made dialogue and cooperation with Moldova on matters related to migration and mobility. It includes a set of targets and commitments, as well as a package for specific support measures offered by the EU and interested EU Member States.

The Deep and Comprehensive Free Trade Area between the European Union offers Moldova privileged access for goods and services to the EU market. The implementation of the Deep and Comprehensive Free Trade Area is underpinned by substantial financial support programs from the EU side.

The European Union's imports from Moldova increased by 7.7% in 2016, to the value of €1.3 billion, an increase of 13.5% since 2014, the year in which the DCFTA entered into force. The European Union is Moldova's first trading partner and the first investor in the country, accounting for 66% of total Moldovan exports and 55% of total trade. The value of certain EU imports from Moldova grew more strongly, for example agricultural imports which grew by 21% in 2016, worth €456 million. Data for the first half of 2017 confirms the positive trend of growth in Moldovan exports to the EU, in particular for a number of products such as sunflower seeds, nuts, grapes, dried fruits, wheat, barley, sugar, certain types of paper, textile and bedding articles. Overall, bilateral trade between the EU and Moldova has increased by 1.5% in 2016 to €3.3 billion.

Access to the European markets and benefits from the DCFTA will further increase once Moldova has aligned its health and safety standards to those of the EU. The food safety reform will enable Moldova to export its agricultural products, notably animal products, whose safety for consumers is strictly controlled in the EU. Overall, if reforms are completed, the DCFTA is expected to boost Moldova's GDP by 5.4% annually.

The DCFTA is compatible with all other free trade agreements that Moldova is part of, and does not limit Moldova's ability to export its products to other countries. Moldova also retains full sovereignty over its trade policy since it is not a member of any customs union. Domestic reforms in Moldova, together with EU support, will upgrade the quality of Moldovan products and services. This will open trade opportunities well beyond the EU market and bring growth and jobs to Moldova.

EU assistance to Moldova supports the objectives of the Association Agreement. It is linked to the country's reform commitments under the Association Agreement and aims at improving the quality of life of ordinary Moldovans in a tangible and visible manner, strengthening the rule of law, as well as improving the business climate, with a view to reaping the benefits from the DCFTA, and supporting greater connectivity between Moldova and the EU in the areas of energy and transport.

The European Union and EU Member States are working closely together to jointly plan their financial assistance to Moldova for 2017-2020 with a view to increasing the impact of their support, strengthening European visibility and bringing added benefits to citizens. The new EU multiannual programming 2017-2020 (Single Support Framework) was adopted on 13 September 2017. It will focus on four priority areas:

economic development;

governance;

connectivity;

contacts between people

Beyond these areas, the programming also includes support to civil society, strategic communication, and capacity development/institution building.

Projects currently being planned will address the following areas:

improving waste collection and waste management in the Cahul region;

infrastructure projects for waste water and sanitation, as well as energy interconnections with Romania;

improving governance in the energy sector, as well as economic governance;

assistance through the EU's Border Assistance Mission, with a specific special focus on Transnistrian conflict settlement;

support to citizens' empowerment to engage in local decision-making and participatory budgeting;

support to the implementation of the Association Agreement including the Deep and Comprehensive Free Trade Area.

EU assistance is conditional to the progress of the country in its reform agenda. To this respect, when major frauds in the Moldovan banking system emerged in 2014-2015, the European Union suspended budget support payments to the Moldovan authorities. The EU resumed its budget support disbursements following the agreement at the end of 2016 on a programme between Moldova and the International Monetary Fund (IMF), whose main aim is to stabilise the banking sector in Moldova, and also given Moldova's compliance with other budget support conditions (e.g. progress on public finance management). In line with the recommendations of the Court of Auditors (report on Moldova, no. 13/2016), the Commission will continue to apply strict conditionality; in doing so, it will pay particular attention to the need for the country to deliver on key reforms, especially in the justice area, the financial sector, the energy sector, public administration and on prevention and fight against corruption (see Council conclusions on Moldova, 15 February 2016), and to the sound implementation of the IMF agreement. Particular attention will be also paid to the respect of effective democratic mechanisms, rule of law and human rights in Moldova.

Tangible results of EU assistance for Moldovan citizens include:

New drinking water supply infrastructures were built in the Municipalities of Nisporeni, Vărzăreşti and Grozeşti. As a result, approximately 15,700 people are provided with safe and sufficient drinking water.

Biomass heating systems have been installed in more than 225 schools, kindergartens, community centres and village halls, making heating better and cheaper. 47 of these sites were also equipped with Solar Hot Water Systems. 35 new biomass businesses were set up and over 400 new jobs have been created in communities. Last but not least, these developments diversified the country's energy supply sources.

Improved public transport in Chisinau and Balti has been funded by the EU.

The forensic centre of the Police was modernised and equipped facilitating criminal investigations.

More than 350 Moldovans living in the diaspora and wanting to return received financial incentives to complement their own investments back in Moldova.

10 business incubators have been set up in the areas of Leova, Stefan Voda, Rezina, Singerei, Cosnita, Cedir Lunga, Nisporeni, Cimislia, Cahul and Calarasi.

Confidence building measures have allowed 70 people from both sides of the Nistru river to set up businesses and create 350 jobs.

In the years 2015-17, 11 capacity building projects involving universities were funded.

In the years 2015-17, more than 900 Moldovan students and academic staff have benefitted from Erasmus+ mobility to study and teach in the European Union.

Between 2015-17 more than 2300 young people and youth workers from Moldova have taken take part in Erasmus+ exchanges, youth policy dialogue and volunteering activities.

9 Moldovan institutions are involved in capacity-building projects in the field of youth, fostering civic engagement and entrepreneurship as part of the EU4Youth initiative implemented under Erasmus+.

The restoration of the Soroca fortress, major Moldovan national heritage, was financed by the European Union. The historical Manuc Bey mansion in Hincesti was restored, preserving this cultural heritage and developing opportunities for economic development through tourism.

Moldova also benefits from regional programmes for the Eastern Partnership region, supporting SMEs, energy, transport, environment, access to finance, growth as well as the overall business environment. Moldova also participates in Cross Border Cooperation (CBC) programmes such as the Black Sea Programme, the Romania-Ukraine-Moldova ENPI Land-Border Programme, and the INTERREG Danube Transnational Programme.

Overall, the EU estimates that its cooperation projects have created 20,000 jobs in Moldova.

An important number of EU Member States and donors are present in the country, as well as World Bank, EBRD, EIB, and UNDP. Donor coordination is well in place in Moldova.

Click on the images to watch how EU assistance has changed the lives of Moldovan citizens or watch the series of videos on YouTube.

On 13 September 2017 the European Parliament and the Council agreed on a €100 million macro-financial assistance programme with a view to supporting Moldova's economic stabilisation and a substantive reform agenda. The decision entered into force on 23 September 2017 and foresees the assistance to be provided in three tranches. However, the disbursement of each tranche will be subject to strict conditionality. In a joint statement that accompanied the decision the Parliament, the Council and the Commission stressed that respecting effective democratic mechanisms, including a parliamentary system and the rule of law, is a pre-condition for any disbursement. The Commission and the EEAS will closely monitor the fulfilment of this pre-condition throughout the lifecycle of the programme. Moreover, on a technical level, Moldova will have to fulfil a number of policy conditions at the moment of the disbursement of any tranche.

Moldova was also the first Eastern Partner to be associated with the Horizon 2020 programme, through which the EU supports research and innovation in view of fostering integration into the European Research Area. Moldova actively participates in the Erasmus+ programme and benefits from cooperation, exchanges, capacity building and mobility opportunities in the field of education and youth. In March 2015, Moldova joined the European programme for culture Creative Europe.

The European Union Border Assistance Mission to Moldova and Ukraine was launched in 2005. Illicit cross-border activities, including trafficking of human beings, smuggling and other illegal trade, were occurring along the Moldova-Ukrainian border. This was aggravated by the fact that the Moldovan government had no direct control over the secessionist region of Transnistria in Moldova (which stretches along 454 km of the Moldova-Ukraine border). The aim of EUBAM is to support Moldova’s and Ukraine’s efforts to effectively manage their common border and actively support concrete measures contributing to the settlement of the Transnistrian conflict.

Moldova is one of the non-EU states that participate in the EU's Common Security and Defence Policy (CSDP) missions and operations. Moldovan experts have contributed to the EU Training Mission in Mali since 2014. In 2015-2016 Moldova also contributed to the EU Military Advisory Mission in the Central African Republic. At Moldova's request, Security Sector Reform advisors from three EU countries helped with the reform process of the security sector in 2014-2015. The EU has continued providing security sector reform-related advisory support under a new phase of an advisory programme to Moldova since 2016.

The EU participates as an observer in the 5+2 negotiation process on the settlement of the Transnistrian conflict, and it continues to support a comprehensive, peaceful settlement based on the sovereignty and territorial integrity of Moldova with a special status for Transnistria.

The EU supports confidence building measures designed to foster regional development in Gagauzia and to facilitate the settlement of the Transnistrian conflict by increasing confidence between Chisinau and Tiraspol through joint initiatives involving local authorities, civil society organizations and other stakeholders from both sides. In addition, the above-mentioned EUBAM mission actively supports concrete measures contributing to the settlement of the Transnistrian conflict.